IT solutions and services provider Hewlett-Packard has turned its global workforce reduction programme into a local success story with an innovative entrepreneurship scheme which will see at least five start-up companies created by former employees.
The five companies, ranging from marketing and communications services to reselling HP consumables, have all been offered office space within HP`s Rivonia premises and guaranteed a certain amount of HP business as part of the company`s Junior Enterprise programme.
Jos Nickmans, managing director of HP South Africa, hopes the company`s approach to job reductions will become a model for corporate SA, saying it was "critical" to create opportunities for small businesses to flourish where possible.
"In all, 31 HP SA staff have taken voluntary packages, and all were offered the chance to start their own small companies with our support," said Nickmans. "In line with our social responsibility drive, we had to give the affected employees the chance to empower themselves and to turn adversity into success where we could.
"Apart from the five start-ups, we also managed to assist several employees to get jobs within our reseller network and partners."
Carly Fiorina, HP chairman and chief executive officer, announced in July that 6 000 jobs would be lost worldwide as deteriorating global economic conditions and related weakness in technology spending, particularly in the consumer sector, took their toll on the company.
However, Nickmans remains upbeat about HP`s prospects in SA and the continent. Spurred by 200% growth in PC sales in the last quarter and several deals involving HP`s high-end Superdome servers, HP SA continues to meet its financial targets.
"We remain optimistic about the growth of the IT industry in SA," says Nickmans, citing research by BMI-TechKnowledge that Africa is on the brink of a technology boom.
Nickmans attributes HP`s growth to the company`s focused approach, cooperative channel model, an aggressive marketing drive, visibility on desktops and portable computers, and its strategy of offering complete and competitive solutions and not just excellent products.
HP has since taken additional short-term actions to control expenses. One example is a voluntary payroll savings programme implemented during the third quarter. More than 80 000 HP employees across the world signed up, and a savings of approximately $130 million was expected for the remainder of the fiscal year.
"The global economic downturn is having a significant impact on business and consumer spending, which in turn is having a significant impact on revenue and profitability for HP as well as many other companies," said Nickmans.
"We`re continuing to take decisive actions to improve our cost structure by simplifying our organisational model, prioritising strategic investments and retaining the right skills base for the future."
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